Over $120 billion was wiped from the value of Tencent Holdings (HKG:0700, OTC:TCEHY) after the US Department of Defense added the tech giant to its list of Chinese military companies.
Battery maker CATL, also included on the list, saw its Shenzhen shares dip 2.8%.
Tencent and CATL dismissed the designation as a “mistake”, asserting they are not military companies or engaged in military-related activities. Tencent stated the listing would not impact its business.
The National Defense Authorization Act of 2024 restricts US government procurement from companies on the list starting in 2026. Analysts suggest Tencent may challenge its inclusion in court, citing its focus on gaming and social networking.
In Hong Kong, Tencent shares closed the day 7.48% lower.